The main legal point established in the judgment is the mandatory nature of compliance with Section 30A of the Recovery of Debts and Bankruptcy Act, 1993, and the inability to set off any amount deposited with the recovery officer against the deposit required under Section 30A.

JUDGMENT :

MANGESH S. PATIL, J.

Since both these petitions arise out of a common order passed by the Chairperson of the Debts Recovery Appellate Tribunal (hereinafter ‘DRAT’) but in two separate appeals No. 14/2018 and 15/2018, to avoid rigmarole we are disposing of both these writ petitions by this common judgment.

2. Heard. Rule in both the petitions. Rules are made returnable forthwith. Learned advocate Mr. Adwant waives service for respondent No. 1 and Mr. Deshmukkh, Senior Advocate waives service for respondent Nos. 2 and 3.

3. The questions that call for determination in these petitions are;

(i) Whether compliance with Section 30A of the Recovery of Debts and Bankruptcy Act, 1993 (hereinafter 'the RDB Act’) is mandatory ? and

(ii) Whether any amount deposited with the recovery officer under RDB Act can be set off against the deposit to be made under Section 30A ?

4. The dispute arises from following set of facts which are common in both the petitions :

(a) The respondent No.1 Bank instituted recovery proceedings against the petitioners under the provisions of the Recovery of Debt Due to Banks and Financial Institutions Act, 1993 (hereinafter ‘Act of 1993’). The petitioner No. 1 in Writ Petition No. 11618/2019 is a partnership firm of which the rest of the petitioners are partners and guarantors whereas in Writ Petition No. 11619/2019 the petitioner is a propriety concern of which the son of the petitioner No. 5 in the first petition is the proprietor and the petitioner No. 2 in the earlier petition is petitioner No. 2. The respondent No. 1 was issued with recovery certificates in both the proceedings.

(b) In execution the property under mortgage was sold by auction to the respondent Nos. 2 and 3 and the sale certificates were issued.

(c) The petitioners raised objections before the recovery officer on various counts like incorrect calculation and that sale notice was not issued in one of the two recovery proceedings. The objections were rejected by the recovery officer and the petitioners in both the petitions sought to challenge those orders by preferring two separate appeals No. 3/2017 and 4/2017 before the Debts Recovery Tribunal (hereinafter 'DRT'), under Section 30 of the Act of 1993.

(d) The petitioners submitted applications in both the appeals requesting that the money deposited by them with the recovery officer in the recovery proceedings be treated as compliance with Section 30A of the Act of 1993. The learned Presiding Officer of the DRT dismissed these applications by a common order. He held that the money deposited with the recovery officer could not be treated as compliance with Section 30A.

(e) The order passed by the Presiding Officer of the DRT was challenged before the DRAT. The Chairperson, by the common order under challenge, has dismissed the petitioners’ appeals.

5. Learned advocate Mr. Talhar took us through the record and would strenuously submit that the petitioners had deposited total amount of Rs.64,00,000/- as against the dues of around Rs. 92,00,000/- which is more than 50% and therefore, the DRT was not justified in insisting for any deposit to be made pursuant to Section 30A. He would submit that the whole purpose of introducing Section 30A was to secure at least 50% money. That purpose was already served and in the peculiar facts and circumstances, petitioners’ applications seeking exemption in compliance with that provision ought to have been allowed.

6. Mr. Talhar would submit that since the recovery officer, as defined under RDB Act is an employee of the DRT any money deposited with him can be set off against the 50% deposit to be made under Section 30A.

7. Mr. Talhar also tried to demonstrate as to how in one of the two recovery proceedings, no sale notice was even published and in the other proceeding there was a serious error about calculations. He would submit that in view of such prima facie material the DRT ought to have exempted the petitioners from depositing money under Section 30A.

8. Mr. T